Pensions Committee report recommends move to net zero carbon investments

A report to the Pensions Committee of Shropshire County Pension Fund recommends that the Fund commits to a net zero carbon emissions approach from its investments by 2050.

This, the report says, is the most effective and thorough way for the Fund, which has around 50,000 members working in 160 organisations across the region, to help manage climate change.

The report follows a motion agreed by Shropshire Council in July 2020 to ask the Pension Fund to reinvest funds invested in fossil fuel dependent assets, and develop an ‘impact investment’ directed towards internationally-recognised sustainable development goals and/or investment in a local sustainable economy.

Separately, the Fund proposes to reduce carbon emissions by committing £130 million from its equity allocation to a sustainable equities fund, and to reduce emissions from activities supported by the Fund further by investing in a low carbon net zero passive fund in place of a FTSE fund.

Moving to net zero emissions from the Fund’s investments would also align with global industry standards.

The report says that exerting pressure from within as a shareholder on companies involved in fossil fuels to move to zero carbon alternatives would have greater impact than simply withdrawing the Fund’s investments from these companies.

It adds that, after considering advice from industry experts and undergoing extensive training, the Fund does not agree that divesting from fossil fuels is in the best interests of the Fund’s 50,000 members.

It says that a greater impact on climate change could be had by the Fund making the commitment to be net zero carbon by 2050, setting carbon reduction targets in the meantime, and supporting climate stewardship activities.

The Pensions Committee, which is made up of councillors from Shropshire Council, and Telford & Wrekin Council, and a pensioner representative, will meet to discuss the report on Monday 17 January 2022. This will include presentations from investment experts who helped to write the report, as well as a presentation from campaign group Fossil Free Shropshire.